Council demanding £9,000 for change of use from guest house to HMO

Council demanding £9,000 for change of use from guest house to HMO

13:04 PM, 18th November 2013, About 11 years ago 15

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I would be grateful for your advice on the following HMO application matter.

I am in the process of applying for a HMO licence for a 7 bed house which my son shares with his friends. They are all post grads, studying medicine in the local medical school.

The City council has approved the HMO application but require me to sign an Unilateral Undertaking of contributions to the council. This I have been informed is a legal agreement, for contributions required in accordance with the Council Planning Obligations Strategy and Local Plan policies 3/7 and 3/8. I also have to pay for the legal fees for this. change of use from guest house to HMO

I have disputed the contribution requested, which comes to over £9000! These included contribution to Informal Open Space, Outdoor and Indoor Sports facilities, Community Facilities etc. I have put forward the argument that the students will have many facilities that are available to them, at the hospital, medical school as well as their undergraduate colleges to which they still belong. These include many social and sports facilities.

However, the response I received was:

As for the contributions, they are correct and payable. The Council cannot take into account the facilities provided either by the colleges or the hospital, because once the use as a HMO is granted, it could be occupied by anyone, and many future tenants will not have access to these facilities.

I really do not object to some contribution to the community, but I think a request for over £9000 is a bit extortionate!

Is this Unilateral Undertaking a legal obligation, as I have not heard or read about this?

Many thanks for your advice.

Kind regards

Alice


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Florance Kennedy

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12:35 PM, 24th November 2013, About 11 years ago

The November Landlord and Buy-to-let Magazine has an article about HMO charges. It says there have been successful court cases challenging these. Worth checking out?
http://www.landlordzone.co.uk/news/landlord-buy-to-let-magazine

Alice Hudson

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15:12 PM, 24th November 2013, About 11 years ago

Reply to the comment left by "Jonathan Wilson" at "18/11/2013 - 13:37":

Hi everyone,
Thank you so much for all your comments!!
The council we are dealing with is Cambridge City Council.
I want to clarify the sequence of events, to Sue particularly.
We did try to apply for planning change of use before the tenants moved in. In fact we went so far with the application and then had to withdraw as we did not have the land registry showing we own the house at that point, so could not fulfil the requirement for signing the Unilateral Undertaking ( we had exchanged but not completed).
I was advised by the Council to withdraw and then reapply when the land registry document come through, so the Council was well aware that I would have to apply retrospectively and the amount requested was from the first application process ie not due to a fine!!
I also took advice from the Council on several occasions before we bought the house and even applied for pre-planning advice to make sure that it would be acceptable for our purposes. We were advised that we would need to apply for change of use form Guest House to HMO. Hence we went ahead made the first application when we exchanged, then withdrew the application due to lack of land registry document.
I did consider keeping it as a Guest House but we wanted to do the right thing, hence we took advice from the Council before making any commitments to purchase.
It seems that they now have us over a barrel and I really feel that this amount requested is extortionate.
Any further advice would be most welcome,
Thanks
Alice

Alice Hudson

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15:21 PM, 24th November 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "19/11/2013 - 16:49":

Thanks Mark. I'm sort of pleased to see that I'm not the only one thinking this request is unfair!! I don't have a facebook page so not commented there but I have replied on your website! Hopefully I will be able to challenge the council! but it does make me wonder why I bothered to try do the right thing in the first place!! Thanks again. Alice

Puzzler

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16:29 PM, 3rd December 2013, About 11 years ago

Reply to the comment left by "Mark Alexander" at "19/11/2013 - 21:44":

Ooh that is a good question, I think there would be no tenancy agreement so neither party would be protected by letting regulations, a service has to be provided (cleaning and utilities at least). Standard cancellation policy is 2 days which is not great for landlords. You would have to register it as a business with HMRC rather than a residential letting business and HMRC might say the rates are not commercial and it doesn't qualify as a viable business (which means she could not offset expenses). The HMO fees are usually charged per room and do seem very high. If the OP has finance she could have problems - a guest house requires a commercial mortgage, B2L lenders will not lend on it and she needs to get change of use. I will be interested to see what others have to say about this.

Jamie M

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17:42 PM, 3rd December 2013, About 11 years ago

Right - Stop playing by the rules, they are all there to screw you in govt and councils et al. The morons running almost everything are useless (I can't say the word I want to but you know which 4 letter word) who can't get a real living so they create rules to lift our money to pay for their slack standards, idiotic ideas, initiatives and life styles. Don't change anything unless you are forced to and then read up on legislation to gen up on whats allowed. Tell them nothing otherwise they will F you. There are clear rules for an HMO and they can't take 9k off you, they are trying to screw you. An HMO with 7 rooms taking a maximum of 14 people costs about £1500 for a 5 year licence. Go to the web site and read the legislation. If it doesn't work then keep it as guest house and tell everyone thats what they are renting, a room in a guest house. Use your house, have a manager wink wink! OK If you don't get what I am saying then you shouldn't be in this game.

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